San Carlos Transit Village developer asks city to waive low-cost housing rules

By Bonnie Eslinger

Daily News Staff Writer

Posted:
08/24/2013 03:00:00 AM PDT

The developer of the controversial San Carlos Transit Village has asked the city to drop or reduce affordable housing requirements for the project.

But staff on Monday will recommend that the city council reject Legacy Partners' request, according to a memo from City Attorney Gregory Rubens.

The current proposal for the mixed-used development includes 280-upscale apartments, along with office and retail buildings. If approved without changes, the development would provide San Carlos with about $7.9 million in impact fees based on square footage to be spent on affordable housing needs, according to Rubens' memo.

To avoid paying those fees, the developer could offer 15 percent of the apartments -- 42 in all -- for lower rents targeted to low-income households.

A July 9 letter to the city on behalf of Legacy from the law firm of Rutan and Tucker, LLP asks the city to waive the affordable housing requirements altogether. If the city won't do that, the letter proposes to provide 10 percent of the units at lower rents for moderate-income households.

In the letter, Rutan & Tucker attorney David Lanferman argues that the city's affordable housing requirement is unconstitutional. Increasing the number of homes in an area improves housing affordability, he states.

"Developers of multi-family rental housing ... therefore should be encouraged rather than unduly burdened by counter-productive exactions of new housing or 'fees in-lieu' and conditions of development proposal," Lanferman wrote.

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In a subsequent letter, dated July 31, Lanferman told city officials that without the waiver or "substantial adjustment" to the affordable housing requirements, the development would not be financially feasible.

In his memo to the city council, Rubens said San Carlos' affordable housing requirements would hold up to legal scrutiny, and a city-sponsored study of the Transit Village shows it would reap a profit for the developer even with some below-market rate units.

"We think our ordinance is supportable and reasonable and addresses the impacts of this project," Rubens said in an interview Friday. "There's a great need for that type of (below-market-rate) housing."

Lanferman and Legacy Partners did not respond to requests for comment on Friday.

The Transit Village is proposed for a 10.5-acre strip along El Camino Real from Arroyo Avenue to Northwood Drive. It would include eight buildings, half of them four stories tall. The development would be constructed on land leased from Caltrain and would flank the city's historic train depot.

For years, the city's eastside residents have protested the development, which they say would be too tall and dense and would worsen traffic, create parking problems and block their view of the western hills.